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Interest is one-way growth.
What you're depending on is a basket of stocks that you hope will go up but can go down. And can stay down for any length of time. Possibly when you need to withdraw the money.
Surely you must have heard that often announced disclaimer "past performance is no guarantee of future results".
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| "The difference between genius and stupidity is that genius has its limits." - Albert Einstein | | "If you are searching for perfection in others, then you seek disappointment. If you seek perfection in yourself, then you will find failure." - Balboos HaGadol Mar 2010 |
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W∴ Balboos wrote: "past performance is no guarantee of future results".
Of course, but the 12-15% is the average annual amount of growth over the 10+ year span. Some years it may be 20%, others 3%, etc. But I think you already know that which is why I am very confused as to what point you are trying to make, if any.
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The point is that negative "interest" can happen just when you need to withdraw the money for retirement so that the 10K you withdraw is really more like a 15k hit to your account.
But then, I think you understand that so I don't get why you are asking about what point is being made. 
The confusion comes in when you call it interest, when it's really growth.
Interest is guaranteed, growth or earnings is not and can be negative. So better to call it growth to avoid confusion. But you most likely knew that already.
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You must accept 1 of 2 basic premises: Either we are alone in the universe or we are not alone. Either way, the implications are staggering!-Wernher von Braun
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TheGreatAndPowerfulOz wrote: The point is that negative "interest" can happen just when you need to withdraw the money
TheGreatAndPowerfulOz wrote: But then, I think you understand that
No, I don't understand why you guys are focusing on a single moment in time. Even if it tanks right before you have to withdraw, if you've had your money in for a long time you've still probably gotten a 12-15% return.
Like I said, Magellan, through all the ups and down, has AVERAGED nearly 16%.
You could also argue that it could go up 45% right before you have to withdraw. So? Why are you talking about single point in times?
I suppose you 2 are right, forget investing. It aint worth it because of what might happen at a given second. 
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Just stop calling it interest. It's not. It's average gains. That's the point.
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Government can give you nothing but what it takes from somebody else. A government big enough to give you everything you want is big enough to take everything you've got, including your freedom.-Ezra Taft Benson
You must accept 1 of 2 basic premises: Either we are alone in the universe or we are not alone. Either way, the implications are staggering!-Wernher von Braun
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TheGreatAndPowerfulOz wrote: Just stop calling it interest.
I mentioned interest in one single place, the OP.
And it IS the correct term. In fact in Excel if you use the PMT function to figure out how to get $1,000,000.00 the rate is defined as "The interest rate per period."
So the 2 of you need to get over yourselves and stop arguing a point that doesn't even exist trying to make it look like you're a smarter than average pedantic.
Geez!!!
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Go get a clue.
Bye
#SupportHeForShe
Government can give you nothing but what it takes from somebody else. A government big enough to give you everything you want is big enough to take everything you've got, including your freedom.-Ezra Taft Benson
You must accept 1 of 2 basic premises: Either we are alone in the universe or we are not alone. Either way, the implications are staggering!-Wernher von Braun
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I provided you with factual evidence and even the definition of the word and you provided me with holier than thou juvenile responses. That’s more than enough clue to see what’s going on.
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ZurdoDev wrote: 10% interest
10% !! Where do I subscribe ? Better you can get here is 3.5%.
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Rage wrote: 10% !! Where do I subscribe ? Better you can get here is 3.5%.
Really? Maybe it's just a US thing but there are lots of Index Funds on the stock exchange that have averaged 12-15%+ for 10+ years. The Magellan Fund, for example, at Fidelity has a 15.87% life return and it was opened in 1963.
Not sure if you can get to this link, FMAGX - Fidelity ® Magellan ® Fund | Fidelity Investments[^]
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The gentlemen seems to have confused "unrealized capital gains" and "interest".
Pretty much, assuming a fund to spread the risk, corporate bonds will give you 5%-6% and municipal bond funds may reach 3% with substantial tax exemptions.
I have money in (NY State) municipal bond funds and they're returning just over 3%, and if I remain living in NY State, that's 100% tax free. Once a year they do have a distribution of capital gains - but that's sort of extra (and taxable). However, the value of the funds fluctuates - mostly I've been behind but have caught up with the initial investment (2x, actually). It doesn't matter unless I sell them, but, since the money's there to return the bond interest I don't have any plans to sell them. Meanwhile, I've gotten a pretty nice pile of interest over the years.
10%? That's the long-term increase in something like the S&P 500 - but stocks go down, too.
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| "The difference between genius and stupidity is that genius has its limits." - Albert Einstein | | "If you are searching for perfection in others, then you seek disappointment. If you seek perfection in yourself, then you will find failure." - Balboos HaGadol Mar 2010 |
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W∴ Balboos wrote: The gentlemen seems to have confused "unrealized capital gains" and "interest".
Interesting that you refused to answer my question. 
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Some people can't take a hint. Kinda moronic, if you ask me.
#SupportHeForShe
Government can give you nothing but what it takes from somebody else. A government big enough to give you everything you want is big enough to take everything you've got, including your freedom.-Ezra Taft Benson
You must accept 1 of 2 basic premises: Either we are alone in the universe or we are not alone. Either way, the implications are staggering!-Wernher von Braun
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TheGreatAndPowerfulOz wrote: Some people can't take a hint. Kinda moronic, if you ask me.
Most of the time on the internet when an arrogant person misunderstands something from the OP they respond with assertions that the OP is wrong and "just because" without any explanation or backing it up with evidence. How refreshing that you and baboos were so humble as to explain how I was wrong so that you could set me straight and backed it up with verifiable evidence. It's the only way morons like me can learn. How refreshing you and baboos are not trolls, but genuine adults trying to have a meaningful and uplifting conversation. Thank you so much for this opportunity to learn from 2 such wise people.
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Now as I observer, all I said was you have confused interest and capital gains. In very simple and straight forward terms I did, indeed, explain how your were wrong.
From my point of view it would be easy to consider your reply as blanket-arrogance to my disagreement and perhaps the troll you seek may be seen in your mirror.
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| "The difference between genius and stupidity is that genius has its limits." - Albert Einstein | | "If you are searching for perfection in others, then you seek disappointment. If you seek perfection in yourself, then you will find failure." - Balboos HaGadol Mar 2010 |
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Fair enough. Now elaborate on how I confused interest with capital gains please.Because I didn’t. But I would love to hear why you think so.
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No you wouldn't. You're not very humble, nor teachable and all the evidence I've seen is you simply want to argue and "prove" you are right and the other guy wrong.
See ya.
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Government can give you nothing but what it takes from somebody else. A government big enough to give you everything you want is big enough to take everything you've got, including your freedom.-Ezra Taft Benson
You must accept 1 of 2 basic premises: Either we are alone in the universe or we are not alone. Either way, the implications are staggering!-Wernher von Braun
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You don't know the first thing about me.
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Everyone is born right handed. Only the strongest overcome it.
Fight for left-handed rights and hand equality.
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From the recent set of emails you've sent I have to disagree and say he seems to know quite a bit about you.
For example . . . nah, just a wast of time.
| Ravings en masse^ |
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| "The difference between genius and stupidity is that genius has its limits." - Albert Einstein | | "If you are searching for perfection in others, then you seek disappointment. If you seek perfection in yourself, then you will find failure." - Balboos HaGadol Mar 2010 |
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So, you still aren't going to explain why you think I am wrong?
So typical. You misunderstand something and then blame the other person. 
Social Media - A platform that makes it easier for the crazies to find each other.
Everyone is born right handed. Only the strongest overcome it.
Fight for left-handed rights and hand equality.
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I know how you act here. And your actions here match what I said.
#SupportHeForShe
Government can give you nothing but what it takes from somebody else. A government big enough to give you everything you want is big enough to take everything you've got, including your freedom.-Ezra Taft Benson
You must accept 1 of 2 basic premises: Either we are alone in the universe or we are not alone. Either way, the implications are staggering!-Wernher von Braun
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Pull out your cell phone and Google them !
Capital Gains vs. Interest
The difference is considerable (in investment terms) and doesn't require the brilliance of a Rocket Surgeon to grasp.
| Ravings en masse^ |
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| "The difference between genius and stupidity is that genius has its limits." - Albert Einstein | | "If you are searching for perfection in others, then you seek disappointment. If you seek perfection in yourself, then you will find failure." - Balboos HaGadol Mar 2010 |
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W∴ Balboos wrote: The difference is considerable (in investment terms) and doesn't require the brilliance of a Rocket Surgeon to grasp.
You are still thinking I said something I didn't.
Social Media - A platform that makes it easier for the crazies to find each other.
Everyone is born right handed. Only the strongest overcome it.
Fight for left-handed rights and hand equality.
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Maybe you don't realize you don't know what you're talking about.
#SupportHeForShe
Government can give you nothing but what it takes from somebody else. A government big enough to give you everything you want is big enough to take everything you've got, including your freedom.-Ezra Taft Benson
You must accept 1 of 2 basic premises: Either we are alone in the universe or we are not alone. Either way, the implications are staggering!-Wernher von Braun
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Roth IRAs didn't come into existence until 1997. By then I was 41.
".45 ACP - because shooting twice is just silly" - JSOP, 2010
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You can never have too much ammo - unless you're swimming, or on fire. - JSOP, 2010
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When you pry the gun from my cold dead hands, be careful - the barrel will be very hot. - JSOP, 2013
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